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FTC files in-app purchase lawsuit against Amazon, seeks refunds

updated 01:37 pm EDT, Thu July 10, 2014

Suit files complaints about wanton, and unauthorized, in-app purchases

According to a US Federal Trade Commission report filed today, Amazon has billed parents and other account holders for millions of dollars in unauthorized in-app charges incurred by children. The FTC's lawsuit seeks a court order requiring refunds for consumers for the unauthorized charges, and permanently banning the company from billing parents and other account holders for in-app charges that have been made without their consent.

The suit is superficially similar to previous complaints against Apple, alleging that the company was complicit in allowing children to purchase sometimes expensive in-app purchases. Apple settled its complaint both with a group of parents and the FTC with a $32.5 million settlement, and refunds to individual users. Reports have circulated that Apple's general counsel sent a Consumer Reports investigation to the FTC to inform the regulatory board of Amazon's policies.

Unlike Apple's complaints, the FTC's complaint against Amazon notes that there were no password requirements of any kind on in-app charges when the Amazon Appstore launched in November of 2011, including on apps that appeal to children. The complaint highlights internal communications among Amazon employees pointing out that allowing unlimited in-app charges without any password was "...clearly causing problems for a large percentage of our customers," and adding that the situation was a "near house on fire."

Several changes have been made to Kindle purchasing password requirements over the last three years, gradually tightening restrictions. However, not until last month -- roughly two and a half years after the problem first surfaced -- did Amazon change its in-app charge framework to obtain account holders' informed consent for in-app charges.

The Commission vote authorizing the staff to file the complaint was 4-1, with Commissioner Joshua D. Wright voting no. The complaint was filed in the US District Court for the Western District of Washington. Amazon has promised to not settle any complaint, and take the battle to federal court.




by MacNN Staff

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  1. prl99

    Mac Enthusiast

    Joined: 03-24-09

    This one looks worse than Apple's bogus FTC complaint. The FTC has a lot more damaging information on Amazon than they did on Apple and should nail them. Of course, Amazon pays more than its share to people in DC but lets see how the Federal Court handles this one. If they get away with it, Apple has every right to file charges against the US government for preferential treatment of Amazon (which I know would never get anywhere).

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